Updated 5:30 p.m. | Posted 11:07 a.m.
Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis and a key player in deciding the nation's monetary policy, will step down after his term ends in February 2016.
Kocherlakota was a former Minneapolis Fed researcher and chairman of the University of Minnesota Economics Department before taking over as president in October 2009. This year he served as a member of the Federal Reserve Open Market Committee, the powerful group whose policies and decision making help decide if consumer interest rates rise or fall.
Earlier in his Fed presidency, he favored tighter interest rate policies as a means to keep inflation in check.
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But his views changed dramatically over the years. He became one of the loudest voices in the Federal Reserve promoting a monetary policy to expand credit and keep rates low as means to promote job growth in the nation and lower unemployment.
His leadership fell under scrutiny in 2013 after some high level researchers at the Minneapolis Fed lost their jobs. The Minneapolis Fed board backed Kocherlakota.
In a statement Friday, Kocherlakota gave no explanation for his surprising decision not to seek a new term.
"I became president of the Minneapolis Bank in October 2009 so that I could be of service to my country in an economic emergency," he said in the statement. "I have been honored to play a role in shaping the response to that dire situation."
Kocherlakota went from favoring higher interest rates to keep inflation at bay, known as a hawk, to being seen as a dove, someone who favors lower interest rates to stimulate the economy.
"He was initially over on the hawkish end and then he changed, partly because the world, I think, turned out not to have the shape he anticipated," said John Berry has been covering the Federal Reserve for 45 years for the Washington Post and other publications.
Lately Kocherlakota been warning that the Fed risks losing credibility because inflation is consistently running below the central bank's 2 percent target.
He was the lone vote against the Federal Open Market Committee's decision to phase out its "QE3" bond buying program.
Kocherlakota has argued the Fed should keep the program going, saying it'd stimulate the economy and better position the Fed to boost the economy down the road.
Berry didn't want to speculate about whether Kocherlakota is stepping down because his views are not winning over the Federal Open Market Committee, but added that the Minneapolis Fed president's stance isn't exactly radical.
Federal Reserve Banks are often called the bankers' banks. They make loans to banks, move currency and coin into and out of circulation, and process checks each day and act as the fiscal agent for the U.S. government.
They also supervise and examine member banks for safety and soundness and participate in the setting of monetary policy.
A committee of the Minneapolis Fed board will search for and recommend a successor.
There will be a broad search, said Randy Hogan, chairman of the Minneapolis Fed's board of directors.